Guys, I’ve got a confession to make: I am awful about saving money. Sure, I have little stashes here and there, and a 401(k) in which I contribute the absolute minimum to; but, in terms of actual savings, there’s not much.
It’s not that I don’t earn enough to invest– however, since eventual retirement is unlikely to be in the cards for me, and I don’t take many vacations, and I don’t own a vehicle, there is little surprise in terms of monthly expenditures, and I haven’t had much trouble living ‘week-to-week’.
That said, as I approach my 33rd year of life, the nicety of having a ‘rainy-day fund’ isn’t lost on me. Investing has, for some time, piqued my interest– however, as some of you may know, it takes money to even start making money. Many of the popular trading platforms require at least $10k to start; which, unfortunately, isn’t something I just have laying around.
On pure chance, I happened to come across a few reviews for the Acorns app two months ago. The premise of Acorns is simple: connect your checking/savings/credit card accounts, and every time you make a transaction not equal to a whole dollar amount (i.e. $4.56), Acorns will automatically invest the remaining change into your portfolio (you can also choose to do these “Round-Ups” manually, as I have).
Your stock & mutual fund portfolio is decided based on a few short questions you answer up-front: salary, age, assets, investment goal, etc. Acorns will then help you determine a portfolio type based on this information, which range from Conservative to Aggressive. You can opt not to follow Acorns’ suggestion, and may change your portfolio at any time.
Initially, I did have qualms about connecting my Chase bank account– however, Acorns does not store this information on their servers, and, let’s face it: if we’ve learned nothing this year, it’s that if someone wants to hack you, they will. I’ve resigned myself to this fact already…though, if you haven’t entirely given up like me, creating a free checking/savings to keep a little money in to use specifically for investments might be a bit safer.
The app is backed by Acorns Advisors, which is SEC registered. Investments through Acorns are insured by the SIPC; so, if the company were to fail, you would be protected up to $500,000. As these are stocks & mutual funds, keep in mind that you are not protected against loss due to declining value of your portfolio.
The management fees that Acorns charges, $1 per month + .25-.5% per year, are a little higher than you’ll get with other investment platforms; and, if you’re looking to have a little more fun, and choose specifically which investments to make, you’re out of luck with Acorns.
However, the lack of a minimum opening investment (I literally started with $10), and the design/ease of use that a novice “investor” like myself gets with Acorns is certainly worthwhile. Potentially, after saving up a few thousand dollars through Acorns, it would be beneficial to look into another service for a more long-term financial play– currently, though, I find Acorns a great app to get started with, and would recommend the investment service to others.
Postscript: I neglected to mention a key feature of Acorns in the first draft: the ability to withdraw funds from your portfolio, at any time, with no additional fees. So, yeah, get investing people.